Navigating the Future Trajectory of Bitcoin for Cryptocurrency Traders – Predicting the Direction in 2024

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Since its inception, Bitcoin has exhibited recurring price patterns, consistent throughout its existence.

These cycles seem to be fundamentally linked to the Bitcoin halving event, which recurs every four years within the network.

With the next halving slated for 2024, we can also expect other elements to play roles in shaping Bitcoin’s valuation over this period. Here’s an overview of what those might be.

Understanding the Halving of Bitcoin and Its Impact on Price Increases

Let’s delve into how the foundational cryptocurrency operates.

On average, new Bitcoin transactions are packaged into blocks every ten minutes.

Miners validate these blocks and incorporate them into the ongoing blockchain transaction ledger.

The incentive for this process is substantial; miners currently receive a reward of 6.25 BTC for each block they mine.

With each halving, this reward is halved. Post April 2024’s halving, the reward will drop to 3.125 BTC per block.

In the past, halvings have typically led to a significant valuation jump within the next year.

For example, following the 2012 halving, Bitcoin’s price soared from $12 to over $1,000 by the end of 2013. After the 2016 event, the valuation climbed from $650 to almost $20,000 in 2017.

And after 2020’s halving, we saw Bitcoin ascend from $8,500 to an all-time peak of $69,000 in 2021.

The consensus among experts is that 2024’s halving will also be followed by a bull market, further setting a bullish tone across the cryptocurrency market in general due to Bitcoin’s influential status.

Despite becoming a more established asset with time and yielding fewer gains from each subsequent halving, smart fund management could still lead to substantial profits.

The Correlation Between Halving and Bitcoin Scarcity

Conceived as a counterpoint to inflation-prone fiat currencies, Bitcoin’s supply is digitally capped at 21 million coins.

These coins come into circulation through mining rewards, and halving events act to decelerate emission rates, reinforcing Bitcoin’s scarcity.

While the supply of Bitcoin remains fixed, its demand from investors continues its upward trajectory.

Characteristics such as its decentralized nature, resilience against censorship, and its use as an inflation hedge have gradually increased the investor base for Bitcoin.

Combining these factors cements the expectation of long-term value appreciation for Bitcoin, with halving events providing additional momentum.

Indeed, pre-halving rallies have been observed; Bitcoin saw a 150% increase in value in 2023 alone.

Post-halving, market analysts anticipate a correction, followed by consolidation, and ultimately the inception of a new bull cycle.

Bitcoin ETFs: A Buzzworthy Topic

The potential for Bitcoin ETFs approval might be another catalyst for Bitcoin’s price surge.

It proposes a method for investors to trade Bitcoin on conventional stock exchanges like the Nasdaq and NYSE.

An ETF, mirroring Bitcoin’s price, provides investors with a way to invest in BTC without acquiring or managing actual tokens, offering a systematic and familiar venture option to those used to traditional investment mechanisms.

On January 11, 2024, the SEC sanctioned all 11 Bitcoin spot ETF applications, including notable ones from Grayscale, BlackRock, and Fidelity. Within just four days of trading, these ETFs reached $11 billion in trade volume.

Such a milestone decision has fundamentally widened Bitcoin’s investor base.

This has already resulted in a massive influx of capital into Bitcoin, which is expected to result in further price ascension.

Additional Key Drivers Behind Bitcoin’s Value Appreciation

ETF introductions aside, Bitcoin, along with its cryptocurrency peers, is garnering increasing interest from both institutional and retail sectors.

In just 2023, the total number of crypto users worldwide grew by 35%, reaching 580 million up from 430 million the previous year, as reported by Crypto.com.

The rising interest from institutional investors, together with the ETFs’ green light and new features like Ordinals, has also propelled Bitcoin adoption forward.

Ordinals protocol expansion includes the storage of images and diverse data types directly on Bitcoin’s blockchain, enabling what are termed ‘Bitcoin NFTs.’

Throughout 2023, Bitcoin led the charge against traditional assets. It outperformed stocks and gold in annual returns and began exhibiting an independent trajectory from the stock market.

For these reasons and more, an increasing array of investors view Bitcoin as a viable store of value and a prudent long-term investment.

Projected Movements: Short-Term Vs. Long-Term

Over time, fundamental elements like supply limitation and rising demand have continually propelled Bitcoin’s price upward.

The anticipated 2024 halving is poised to spark another bull trend cycle in the years following.

However, predicting immediate, specific price points can be challenging due to prevailing market conditions – noticeable even with the unexpected rise to $63,700.

Therefore, one must approach the volatile market with an informed and cautious strategy, always striving to make enlightened investment choices.

Yaniv Baruch is the COO at Playnance, a pioneering B2B platform in the Web 3.0 arena, providing an easy-to-integrate, white-label P2P trading game for trafficking owners and influencers to monetize effortlessly. With roots in fintech since 2004 at RBC, Yaniv brings a wealth of knowledge from the Web 3.0 sphere along with a vast array of financial market skills.

Featured Image: Shutterstock/Sergey Nivens